Lohan pleaded not guilty to the charge Wednesday (if convicted, she could face up to three years in prison). Los Angeles County Superior Court Judge Keith Schwartz immediately revoked the actress' probation related to a 2007 drunk driving conviction.

"Ms. Lohan maintains her innocence, and now that I've seen the police reports, I believe the case is entirely defensible," Holley told CNN. "Having said that, we will entertain a discussion concerning a plea if it means no jail so that she can move forward with her recovery and her career."

Lohan is due in court Feb. 23; it will be decided then if the theft charge warrants sending her back to the slammer immediately on a probation violation.